In a speech given in June, before now Prime Minister Andy Burnham entered Downing Street, he set out his vision for the biggest council house building programme since the post war period, adding that vacant public land will be used to reduce costs.
“Britain has lost almost 1.5 million council homes since the 1980s and around the same number of people are now on housing waiting lists and have been there for a very long time,” Burnham said at the People’s History Museum in Manchester. “As a result, the country is in a housing trap.”
While many welcomed the new Prime Minister’s commitment to housing, delivering these new homes and meeting the ever-increasing demand for affordable accommodation is another matter. The previous government, led by Sir Keir Starmer, also highlighted housing and construction as a key priority, with a pledge at the beginning of his time in office to deliver 1.5 million new homes over the five years to 2029/30.
However, official government figures show an estimated 199,500 net additional homes were delivered in England in 2025/26, which is considerably below the average of 300,000 per year that would be needed to meet the 1.5 million target.
Savills also estimates that England will average 167,500 new homes per year over the five years to 2029/30, well below the Government’s target, but roughly on par with the 20-year average for delivery.
Dr. David Crosthwaite, Chief Economist at Building Cost Information Service (BCIS), said this is a pivotal period for the housing market. “The new administration at No. 10 has started to set out an ambitious agenda to increase council housebuilding and support a recovery in housing delivery, which is welcome,” he said. “There is also optimism surrounding the reappointment of Housing Secretary Angela Rayner and the appointment of Chancellor John Healey, who brings previous experience as a housing minister.”
IS A REVOLUTION COMING? Burnham’s promise of a revolution in council housing could prove challenging. In the 1950s, councils built on average around 147,000 homes a year. In the past 10 years local authorities have averaged round 1,400 homes a year.
The reasons for the decline in council housing are as long as they are complicated. Margaret Thatcher’s Right to Buy scheme, which started in the 1980s, has been widely credited for helping reduce the availability of council housing stock in general. Plus, there have been restrictions introduced in what councils can and cannot do regarding new homes, and a reduction in central government funding.
Councils have long campaigned for the Right to Buy scheme to be reformed, claiming that a sizeable chunk of the proceeds made from selling these properties go straight back to central government, leaving them unable to fund replacement housing stock.
The Social Housing Bill, which is currently going through Parliament, would introduce a number of changes that could alleviate the problems caused by Right to Buy, including increasing the qualifying period for when a council property can be sold from three years to 10 years.
The proposed legislation would also cap the available discounts at 5% of the property’s value, potentially increasing to a maximum of 15%.
A NEW APPROACH IS NEEDED The think tank Resolution Foundation has also warned the new government will need a new approach and new money if it is serious about building more council houses.
The Foundation has called for the £39 billion Social and Affordable Homes Programme (SAHP) to be ring-fenced exclusively for social rent homes over its 10-year lifespan. It has also called for greater use of the £2.5 billion low-cost loan facility in the newly created National Housing Bank to stimulate affordable housebuilding through housing associations, which has the potential to add another 4,000 to 6,000 affordable homes a year.
In total, the think tank estimates such measures would mean building 66,000 affordable homes a year, matching recent highs and remaining within the government’s budget. But this is a far cry from the post-war era when local authorities were building 100,000 homes a year themselves.
“The government will need to strike a balance between affordability for tenants and building at scale,” said Senior Research and Policy Analyst, Hannah Aldridge.
“By making careful use of the Social and Affordable Homes Programme, private developer contributions and the National Housing Bank, the new Government can boost the supply of social rent housing and build more affordable housing overall.”
Maurice Lange, a Senior Analyst at the think tank Centre for Cities, said the previous government, led by Sir Keir Starmer, had already increased the grant money available to councils to build new homes under the Social and Affordable Homes Programme, which is now double what it was 10 years ago.
Lange added Burnham could increase the grant funding further or change some of the borrowing rules around it. He said the new government could also reform the Housing Revenue Account (HRA), which local authorities use to track all the money coming in and out of their housing stock.
Lange said HRA’s have been by exposed over the years to various central government decisions, including caps to social rent, which invariably mean they have less money coming in and therefore less to spend on either improving existing stock or on building new homes.
In addition, Lange said the scope of the National Housing Bank, which was launched by the government earlier this year, could be widened further to give loans directly to councils at more preferable rates than the Public Works Loan Board, which often funds many public sector infrastructure projects.
CHANGING PLANNING POLICY The new government has also announced changes to the National Planning Policy Framework (NPPF), which aim to fast-track the building of new homes. The updated NPPF now includes a default ‘yes’ for homes within reasonable walking distance of well-
connected railway stations, alongside new minimum expectations for how much housing should be built in such areas.
Other changes include a more flexible approach to density, replacing the previous draft’s fixed range of between 40 and 50 dwellings per hectare with an expectation to maximise density where accessibility, infrastructure, viability and local character allow.
The Royal Town Planning Institute called the updated NPPF a “positive step forward” and its Communications and External Affairs Director, Simon Creer, said the planning system is now moving from “reform to delivery”.
“With the national direction set, it is now over to planners and the wider built environment sector to turn policy into sustainable development that meets the needs of the communities.”
And Ben Standing, a Partner in planning at law firm Browne Jacobson said this represents the most substantial rewrite of the NPPF since its introduction in 2012.
“To bring forward the scale of new homes that will be required if the government is to get anywhere near realising its economic growth strategy, Westminster is effectively replacing the carrot with the stick for local authorities, which are now under pressure to get their own house in order by continuously update local plans,” he said.
“Failure to do this will put areas at risk of development happening in areas where it’s most cost-effective to build, but without the opportunity for councils to help shape new places as part of their place-making functions,” he added.
DEVOLVING POWER TO THE REGIONS The new government has also promised more action around devolution and shifting power away from Westminster and to the regions. This could well include the transfer of housing, planning and regeneration powers to directly-elected mayors and strategic authorities across England.
This, in turn, could lead to a much more strategic approach to these issues, with decision-makers focussing on regional needs, rather than individual boroughs or districts.
Of course, there are plenty of other issues affecting the current level of housebuilding, including issues around skills, the supply of materials and the national economy itself, which remains sluggish.
And it is still very early days for the Burnham administration. All eyes will be on this year’s Labour Party annual conference in Liverpool at the end of September, and Chancellor John Healey’s first Budget on 28 October, when more details are expected to be announced.
The construction sector has every right to feel jaded when it comes to the corridors of power, especially given the revolving door of ministers and stalled initiatives in recent years but, as previously noted, Healey is a former housing minister and seen around Westminster as someone who is pragmatic and true to his word. And the new administration has wasted no time with a series of new policy ideas. Maybe things are about to change?